Rackspace to lay-off 6% of workforce

Rackspace, the cloud computing and server company, announced that it is cutting 6% of its US workforce, in addition to making an unspecified number of overseas positions redundant.

The announcement was made via a blog post by CEO Taylor Rhodes, who recently presided over Rackspace’s USD 4.3 billion privatization. He said that most of the cuts would affect administrative and management jobs.

I’m writing to report that Rackspace today initiated layoffs that will cut our U.S. workforce by about 6 percent. We are proposing somewhat smaller reductions in our offices in other countries, through consultative processes governed by local laws.

While the exact number of jobs being cut was not specified, Rackspace in its last quarterly filing before privatization, listed 6,199 employees company-wide. Local media in San Antonio, where the company is headquartered, estimated the number of layoffs as 275 employees.

Rhodes further noted in his blog post that while certain parts of its business continue to grow, such as it’s managed security, private cloud offerings and support for AWS and Azure, other parts of the business have lagged behind.

We’re confident we can accomplish these reductions without any effect on the expertise and exceptional customer service we provide to our customers. We have targeted these cuts primarily toward our corporate administrative expenses and management layers, while striving to create the least impact to our frontline Fanatical Support and product teams.

In the past, officials from the company, including it’s CTO, have stated how by privatizing, the company can avoiding the quarterly pressure of Wall Street earnings and hence make changes and grow its business.